My first lease renewal :)

[Marcus Holloway]

Quick post. Today one of my tenants asked if he could renew early for the same rate. Young couple, never been late, not problematic. Hell yea you can renew!

I was thinking with the current market that my chances were pretty good but you never know.

Our property is about $100-125 under market in the area so I also thought about raising the rent. We still cash flow even at the lower rate.

This Is our 3rd tenant but he’s the first to ever renew. Gotta tell, as a newer investor, it felt pretty good to get that text. I feel like I’m honestly providing a quality home and the security of another year of income gives me a lot of confidence that I’m doing something right.

[Nathan Gesner]

Quote from @Marcus Holloway:

Quick post. Today one of my tenants asked if he could renew early for the same rate. Young couple, never been late, not problematic. Hell yea you can renew!

I was thinking with the current market that my chances were pretty good but you never know.

Our property is about $100-125 under market in the area so I also thought about raising the rent. We still cash flow even at the lower rate.

This Is our 3rd tenant but he’s the first to ever renew. Gotta tell, as a newer investor, it felt pretty good to get that text. I feel like I’m honestly providing a quality home and the security of another year of income gives me a lot of confidence that I’m doing something right.

I'm glad to hear it. Just be careful you don't get too far behind on rent. States are starting to enact laws that limit how much you can increase rent. I'm seeing a lot of Landlords struggle because they let their tenant get way below market and now they can't increase more than 3% or 5% per year, which means they'll never catch up as long as that tenant stays.

The market is hot and you should have no problem finding a new renter. If your current renter is smart, he knows there's not much available and he's getting a good deal. He's not going to move over an increase if he's still below market and can avoid moving, which is expensive. If he's $125 below market, I would consider a $50 - $75 increase.

My recommendation is that you never let rent get more than 10% below market, preferably closer to 5%, and that's for excellent renters. $100 a month is $1,200 a year which will buy a couple new appliances. Two years of that could pay for some new flooring or paint. 3-4 years of that could pay for a furnace, siding, or windows.